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The art economies value chain reports: art centre finances

27 Nov 2014

Funding from Federal and State/Territory sources reaches more than 90% of Aboriginal and Torres Strait Islander artists in remote Australia. Funding for the sector is dominated by Federal sources (79%), though in some regions this is nearly 100%. Eighty-seven Art Centres in remote Australia shared $26.1 million of funding in 2012/13. In 2010/11, grant income equalled and then overtook sales as the main income source for Art Centres. The percentage of Art Centres whose funding income exceeds their sales income has almost tripled since the early 2000s; over 60% of Art Centres are now in this category. A quarter of total funding to the sector is for peak bodies and industry development. Peak body funding is evenly shared by Federal and State/Territory governments, though there is significant variation in the levels of funding between State and Territory agencies. From 2009/10 to 2012/13, the Indigenous Employment Initiative (IEI) added over $35.3 million to remote area visual arts funding – a similar amount ($39.5 million) to the other Federal funding for art activities. In 2012/13, the IEI program was the largest funding contributor to Art Centres. A large part of the growth in reliance on funding for Art Centres is due to the IEI. Since the IEI program started, 57% of Art Centres pay more in wages than in artists’ payments, compared to 29% before the program. This increase in funding for employment activities has meant that, overall, Art Centres’ roles are changing, becoming more focused on employment, training and community activities. Blaming the global financial crisis (GFC) is an over-simplification of a complex situation. Art Centre mean sales began falling several years before the GFC. While the falls have been sustained, there are some recent signs of sales growth. There has been a fall in retained earnings (profit/loss) over the last ten years, from a mean $106,000 surplus in 2004/05 to a mean $27,000 deficit in 2012/13. A small number of large, established Art Centres dominate the sector’s sales. Fewer than 20 Art Centres make 70% of art sales in remote Australia. Almost 60% of Art Centres make $250,000 or less in sales per year. Financial and operational circumstances vary markedly between art regions and among Art Centres in the same regions. All regions have seen fluctuating sales in recent years; some regions have seen large declines turn into significant growth the following year. In other regions, the reverse has happened. A counterpoint to this volatility is the stable commission arrangements with artists: the artists’ share of Art Centre sales has remained consistently close to the ‘industry standard’ of 60%. In 2011/12 and 2012/13, mean Art Centre sales have seen modest growth. The number of art regions recording falling sales has also halved. This corresponds to other signs of recovery in the secondary art market.

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